Regulators address rail transport of oil

By Jon Ross and Catie Fry|Tuesday, January 28, 2014

As regulators try to figure out how to respond to a rash of North American rail accidents that have occurred during the shipment of oil, officials across both the Canadian and U.S. governments are proposing new ways forward for shipping oil and other hazardous goods.
In Chicago, Mayor Rahm Emanuel has proposed a federal freight fee on both the oil manufacturers and the end users, which he said will help encourage regulation compliance. The money generated will be used to upgrade aging infrastructure.
Speaking at the United States Conference of Mayors' winter meetings, he also proposed building safer railroads “using better technology, which could serve as a life-saving backstop when human error occurs,” and he wants to “mandate those who transport hazardous materials on railways to carry the necessary insurance to compensate for the loss of life and property after an accident.”
The mayors of Madison, Wisc.; Peoria, Ill.; Philadelphia; Milwaukee; and Kansas City also expressed support for Emanuel’s ideas.
“Freight train accidents across the United States should be more than a wake-up call,” Emanuel said in a statement. “Railroads are the backbone of our country, providing an economic lifeline to Chicago and communities across the nation. These incidents must move us to take action so we can strengthen safety standards and employ new technology to prevent future harm.”
The Association of American Railroads said a tax on the transportation of energy products could hurt end consumers. AAR Chief Executive Officer Edward Hamberger said, however, that the industry supports a number of Emanuel’s ideas, such as higher tank car standards, and full and proper hazardous materials disclosure.
“As we’ve seen with other federal tax and fee proposals, the end result is unfortunately that consumers often end up footing the bill,” Hamberger said in a statement. “With heating costs already expected to be high this winter, consumers should not be socked with potentially higher energy bills.”
On Thursday, the National Transportation Safety Board on issued its recommendations to the Department of Transportation regarding the safety of transporting crude oil by train.
The NTSB cited data from the Association of American Railroad’s Annual Report of Hazardous Materials that said crude oil shipments by rail have risen by more than 400 percent since 2005.
“The NTSB is concerned that major loss of life, property damage and environmental consequences can occur when large volumes of crude oil or other flammable liquids are transported on a single train involved in an accident, as seen in the Lac Megantic, Quebec, accident, as well as several accidents the NTSB has investigated in the U.S.,” the group said in a news release.
The first recommendation would require an expansion in planning for hazardous materials routes in order to avoid populated and sensitive areas.
Secondly, NTSB advises the development of an audit program to be sure that rail carriers with petroleum products have proper response capabilities to deal with worst-case discharges of product on a train.
The final recommendation is to audit shippers and rail carriers to be sure that they are properly classifying hazardous materials in transportation and have safety and security plans in place.
In Canada, Minister of Transport Lisa Raitt said the government, in the guise of Transport Canada, is embracing the recommendations made by the Transportation Safety Board in the aftermath of the Lac-Megantic disaster. In a statement last week, she noted that the Canadian government has committed $155 million in clean up and support to the area surrounding the crash.
“Transport Canada continues to work with all its stakeholders, including officials in the United States, as we look together to what additional requirements may be needed for the North American fleet. This includes exploring the retirement, retrofit or repurposing of older DOT-111 tank cars. As these tank cars regularly cross Canadian and American borders, a North American solution is required,” she said.
Raitt added that a committee is looking into railway safety management systems and is exploring the current dangerous goods program.
“Transport Canada has also launched three industry-led working groups … to provide recommendations by the end of January on short term and long term safety actions and enhancements that could be made to the DOT-111 tank cars,” she said.